In order to restore a degraded alkaline grassland, the local government implemented a large restoration project using fences in Changling county, Jilin province, China, in 2000. Grazing was excluded from the protected area, whereas the grazed area was continuously grazed at 8.5 dry sheep equivalent (DSE)/hm2. In the current research, soil and plant samples were taken from grazed and fenced areas to examine changes in vegetation and soil properties in 2005, 2006 and 2008. Results showed that vegetation characteristics and soil properties improved significantly in the fenced area compared with the grazed area. In the protected area the vegetation cover, height and above- and belowground biomass increased significantly. Soil pH, electrical conductivity and bulk density decreased significantly, but soil organic carbon and total nitrogen concentration increased greatly in the protected area. By comparing the vegetation and soil characteristics with pre-degraded grassland, we found that vegetation can recover 6 years after fencing, and soil pH can be restored 8 years after fencing. However, the restoration of soil organic carbon, total nitrogen and total phosphorus concentrations needed 16, 30 and 19 years, respectively. It is recommended that the stocking rate should be reduced to 1/3 of the current carrying capacity, or that a grazing regime of 1-year of grazing followed by a 2-year rest is adopted to sustain the current status of vegetation and soil resources. However, if N fertilizer is applied, the rest period could be shortened, depending on the rate of application.